Lula Arrest Weakens Rousseff

Brazil's former President Luiz Inácio Lula da Silva is now being probed for ties to the Petrobras corruption scandal. (Photo: Rio Real Government)

The corruption case against Lula weakens embattled Brazilian president further.

Inter-American Dialogue

Brazilian federal police on Friday detained former President Luiz Inácio Lula da Silva for questioning and searched his properties as well as his institute in an operation that involved some 200 agents. Lula, who has been implicated in connection with the massive corruption scandal at state-run oil company Petrobras, has repeatedly denied wrongdoing. His wife and sons are also being investigated. What does the police raid mean for Lula’s power and prestige in Brazil and abroad? How big a blow is Lula’s detention to the government of his protégé, President Dilma Rousseff? Does Rousseff need to distance herself from her mentor for the sake of her political survival? How will the Supreme Court’s recent decision to put House Speaker Eduardo Cunha, a Rousseff foe, on trial for corruption charges related to the Petrobras case affect the impeachment case against Rousseff?

Peter Hakim, member of the Advisor board and president emeritus of the Inter-American Dialogue: The police actions against President Lula were the latest blow to his credibility and influence. Once considered Brazil’s greatest political leader ever, Lula left office with 80 percent-plus public approval, but his approval rating has now slipped below 30 percent. Unless put on trial and found guilty, however, Lula cannot yet be written off as politically irrelevant. Despite his tarnished reputation, many Brazilians hold him in high regard. The Workers’ Party (PT) he founded 30 years ago has no one else of his stature or authority. Indeed, across the political spectrum, there is a vacuum of leadership. Although hardly the favorite today, Lula could well be a viable candidate for president in 2018. President Dilma’s poll numbers are worse, close to single digits. Her aptitude for politics and governing is limited, and she has failed to mobilize the political support needed to address Brazil’s battered economy. Without Lula’s support, her capacity to govern will shrink further. She will become even more isolated and ineffective, while problems with the Brazilian electorate, Congress, and her own party are likely to grow. Impeachment remains a strong possibility and a case can be made for the president’s resignation. It is disappointing, however, that Brazil’s political leaders have not done much to build a minimal consensus on what next steps might follow her departure in order to confront the country’s massive challenges—particularly to put some order and realism into policymaking in the legislative and executive branches and pursue a serious program for restoring economic stability and growth. Brazil is not a deeply polarized nation. Its Congress is erratic and mediocre, but it is not divided into two ideologically clashing blocs. Compromise is possible. It is early to consider Brazilian politics and economics broken and irreparable, just as it was premature to proclaim Brazil a robust success story a half dozen years ago.

Joel Korn, president of WKI Brasil: Former President Lula’s mandatory deposition in the midst of the ongoing corruption scandals investigation reflects the strong and growing perception of his tacit knowledge and involvement in the bribery scheme that became an endemic practice over the past several years. Notwithstanding his vehement denials of any wrongdoing, the implications of the police raid are evidently negative and undermine Lula’s political leadership and prestige. Moreover, it weakens further the fragile position of President Dilma Rousseff, whose abilities to lead the government and obtain the necessary congressional support for the crucial economic measures have been seriously compromised. The upcoming depositions from key players in the corruption scandal are expected to add more fuel to the severe political crisis, making it even more difficult for the government to move away from its current state of virtual paralysis. Although the outcome of the impeachment process against President Rousseff is yet uncertain, recent developments and what remains to unfold within the scope of the ‘Lava-Jato’ investigations will certainly constrain even more her ability to govern over the remaining three-year period of this administration. The fast-deteriorating economic situation and the associated social pressures that come along with it will prompt a renewed surge of street demonstrations. As it usually happens, these manifestations may prove to be quite effective in drawing the attention of the president and Congress about the need to speed up the process to restore the government’s legitimacy and credibility, within a democratic and institutional order. This is certainly a pre-condition to re-establish the necessary country stability, to move forward with the overdue economic measures and, thus, regain the confidence of investors and consumers.

Melvyn Levitsky, professor of international policy and practice at the University of Michigan’s Gerald R. Ford School of Public Policy and former U.S. ambassador to Brazil: The popular news magazine Época headlines its article about the corruption scandal, ‘Lula knew about the Petrolão’ (Petrobras scandal); this according to ex-federal deputy Pedro Corrêa, now being held for taking bribes and in a plea-bargaining program. Several other officials and politicians, some in the Workers’ Party (PT) coalition, and also involved in plea bargaining and awaiting trial, have reportedly also accused Lula in both the ‘Mensalão’ (vote-buying scheme) and the Petrobras scandal. Lula has been under an anti-corruption microscope for the past several years. When Lula came into office in 2003, the PT was seen as one of the few ‘honest’ parties; it is now clear that it is not. This latest development will certainly diminish Lula’s chances to return to the presidency. Brazil is in bad shape on both the political and economic fronts. One of the bright spots is that a group of young federal prosecutors working with the federal police and with federal judges is beginning to root out corruption in a serious way. There will be more to come. It’s a perfect storm of problems for a country that had been so praised over the past 10 years for weathering the global fiscal crisis. Dilma owes her two elections primarily to her connection to Lula’s popularity, so it’s unlikely that she will disavow him. Although she has not been accused personally of benefiting from the Petrobras imbroglio, her impeachment by the Brazilian Congress now seems more possible.

Republished with permission from the Inter-American Dialogue's daily Latin America Advisor

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